A single player sits at a baccarat table hidden inside the private room of an exclusive gaming area in a Macau casino.
As the cards are turned, the player, a hired hand, gives a play-by-play account via an earpiece wirelessly connected to his mobile phone.
On the other end of the call, hundreds if not thousands of miles away, is the real gambler — a player beyond the border in China.
Bloomberg says that was the scenario described by five people who work at Macau’s junket operators, which front money to high rollers and bet on their behalf using wireless headsets — in violation of the city’s May 9 ban on using phones at betting tables.
At least three gaming promoters who conduct business at independently run VIP rooms at Macau casinos operated by SJM Holdings Ltd. and Melco Crown Entertainment Ltd. told Bloomberg News they’re using headsets to evade the ban, with the proxy players sometimes using their hair to hide the devices.
They asked not to be identified because the activities are illicit.
A statement from Melco said its casino facilities, including VIP rooms, are complying with local regulations.
SJM didn’t respond to requests for comment. SJM executive director Angela Leong said in a May 17 interview that Macau casinos, including SJM, have increased monitoring to prevent phone betting.
Macau banned phone bets for a simple reason: money laundering.
Mainland gamblers can get credit lines from Macau junket operators, who are repaid by the players inside mainland China.
The gaming credit stays outside China, away from scrutiny by the Chinese government and its currency controls — and where it can be cashed out in Macau as gambling proceeds.
While a Macau law banned phone betting in 2001, there was no enforcement as long as operators reported the bets and the identities of the gamblers to the regulator, according to legislator Jose Maria Pereira Coutinho.
“There’s a situation of permeability for money laundering that the government must pay full attention to after the ban,” said Coutinho, who called the ban symbolic.
“A regulation without effective implementation will create a new loophole as the industry may find a way to avoid it.”
It’s unclear how the new ban will work.
Since there’s no longer a system for reporting bettors, phone bets are now clandestine, according to the people.
On top of that, the rule doesn’t come with sanctions for violators, according to the Gaming Inspection and Coordination Bureau.
Junket operators say phone betting revenue — worth an estimated US$2.6 billion last year — is crucial for their operations as they struggle with a two-year slump.
Gaming revenue plummeted 36 percent last year from its 2013 peak as high rollers stayed away from the tables due to China’s anti-corruption drive.
Not all phone bets facilitate money laundering, and some countries, including the Philippines, allow the practice.
Melco, which operates the City of Dreams and Studio City casinos, said in its statement that its facilities are fully compliant.
“Macau is a highly regulated market and the gaming authority has a strict regulatory regime aimed at closely monitoring the activities of licensed gaming promoters within casinos,” the company said in an e-mailed statement.
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